LAXintl
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AS Ends Another Mexico Flight; Whats Latin Future?

Thu Feb 28, 2013 10:48 pm

I noticed in DOT filings that Alaska seeming has dropped another Mexico service.

They filed to inform the DOT that Horizon Air service between LAX and La Paz would be ending on April 6th freeing up the designation for other airlines potentially.

By my estimates this makes over 10 routes which have been dropped over the years.

While we certainly know Hawaii now plays a major part of AS operations, their Mexico flying at one time represented nearly 20% of ASM (peaked in mid 2000's) while in 2012 it down to 7%.

So where does Mexico sit in the AS network future? They entered into a codeshare with AeroMexico in recent times, will they use this as quasi presence instead?
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BoeingGuy
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Thu Feb 28, 2013 11:24 pm

That's a bit of an overreaction. It was posted months ago in an OAG thread that AS/QX is pulling out of LAP (unfortunately, because I far prefer LAP to SJD as a place to be and hoped they'd keep LAP).

Apparently, AS is electing to focus on SJD and there is a new fast freeway between LAP and SJD.

AS has adjusted frequencies to Mexico in recent years as the tourist trade slowed down, and discontinued CUN and a few SFO flights, but it's not like AS is engaging in a massive Mexico pulldown. They still even maintain service to secondary destinations such as LTO, ZLO and ZIH and have added SJC-SJD, SJC-GDL and SAN-PVR in the past few years.

Actually AS has been in and out of LAP several times over the past 15 years, so maybe it will come back.

Quoting LAXintl (Thread starter):
By my estimates this makes over 10 routes which have been dropped over the years.

Let's see if I can do this....

SJC-PVR
LAX-LAP
LAX-CUN
SFO-CUN
SEA-CUN
SFO-MZT
SFO-ZIH
ONT-MEX
SMF-GDL (which didn't last long)
PHX-SJD
ACA service (not sure of the routing)
PDX-SJD (didn't last long)
PDX-PVR (didn't last long)
SEA-MZT (not sure if this one is coming back)

So I get more like 15.

Quoting LAXintl (Thread starter):
their Mexico flying at one time represented nearly 20% of ASM (peaked in mid 2000's) while in 2012 it down to 7%.

That's partially just due to AS's ASM being much greater now than in the mid-2000s also. AS still has a healthy Mexico route network.

[Edited 2013-02-28 15:42:02]

[Edited 2013-02-28 15:42:59]

[Edited 2013-02-28 15:43:31]
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Thu Feb 28, 2013 11:48 pm

I see the LAX-PVR flight still exists (with steep fares a month out). So that is the one I care about.  
Quoting BoeingGuy (Reply 1):
Apparently, AS is electing to focus on SJD and there is a new fast freeway between LAP and SJD.

Interesting!

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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 12:09 am

I would hope to see possibly a bit of growth from SAN to Mexico as part of the (apparently continuing) growth by AS in our fair city. SAN-SJD is going daily double starting in a couple of weeks and SAN-PVR seems to have found a viable year-round niche at 3x weekly.

I'd love to see AS try SAN-GDL. Y4 seems to be having issues from here (and other places to be honest) and to the best of my recollection, we have never had an American carrier try to serve the SAN-GDL market. (DL has had the authority in that market for many years -- I don't think they have retained it recently -- but it was never served.) There have been a few attempts at SAN-GDL by Mexican cx but the competition of lots of cheaper (domestic) service from nearby TIJ airport has undermined the service from Lindbergh. I think AS would stand the best possible chance to do well with local (American) traffic from SAN, as well as some connecting traffic from some of the other new routes in and out of SAN.

SAN-MEX has had successful US-carrier service in the past (mainly from WA for years plus a couple of short-lived attempts by CO.) I think DL could have continued the route but like many of their inherited WA routes, didn't. There is obviously competition from TIJ in this market as well but again, I think AS could make this route work from SAN as well.

AS has obviously done well with the leisure resort traffic from SAN and I don't see why they couldn't get a solid hold on the more business-oriented markets from here as well. I'm sure there is lots of daily traffic between SAN and MEX and a reliable, popular American carrier such as AS should certainly be able to capture enough of the north-of-the-border travelers to operate a daily round trip out of Lindbergh Field.

I could also see SAN-MZT and maybe even a couple of sub-daily QX routes as well on the AS route map. It seems that the issues with Mexican travel are starting to quiet down a bit (as far as news headlines anyway) so I'm hopeful that there may be a slow appearance of new service in some of these SAN-Mexico routes over the next year or two.

bb
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 1:14 am

A few of the weekly frequencies dropped by LAX-LAP will be added to LTO in April.

Quoting LAXintl (Thread starter):
They entered into a codeshare with AeroMexico in recent times, will they use this as quasi presence instead?

AM will add their flight number to AS metal only....Not the other way around.

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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 1:29 am

To the O.P. - you have to keep in mind that the drug violence is Mexico has devastated their tourism industry. Tourism from the U.S. is way down from times past. The AS service pull-down could be another casualty of the drug war.

You can see a parallel in the cruise industry. Not too long ago, there were several cruise lines serving Mexico from California which included San Pedro, Long Beach and San Diego as home ports. In this coming year, there will be months when San Diego doesn't see a single cruise ship. This is after money was invested in improved facilities for cruise ships and despite the fact the ships dock next door to the airport and several major tourist destinations.

Mazatlan for example won't see a cruise ship according to cruisett.com until November 2013. Even Cabo is only getting a handful of ships per month in the peak periods.

If and when the violence subsides and Mexico can demonstrate its safe to go back, hordes of tourists will return. I'd love to spend time in places like Acapulco and the areas inland but I'd be insane to take my family there given its on a drug trade corridor.
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 1:41 am

Quoting BoeingGuy (Reply 1):
SJC-PVR
LAX-LAP
LAX-CUN
SFO-CUN
SEA-CUN
SFO-MZT
SFO-ZIH
ONT-MEX
SMF-GDL (which didn't last long)
PHX-SJD
ACA service (not sure of the routing)
PDX-SJD (didn't last long)
PDX-PVR (didn't last long)
SEA-MZT (not sure if this one is coming back)

did they fly SEA-MEX at one point?
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 1:47 am

Quoting Deltal1011man (Reply 6):

Nope

Quoting BoeingGuy (Reply 1):
ACA service (not sure of the routing)

How many years you covering? I started with AS in '98 and ACA had been dropped already
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 2:10 am

Quoting sonomaflyer (Reply 5):

It's interesting to note though that this is mainly the Pacific coast as CZM and CUN are still doing great as cruise ports.
 
LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:20 am

Quoting BoeingGuy (Reply 1):
That's partially just due to AS's ASM being much greater now than in the mid-2000s also.

True AS has grown, however it certainly has not maintained the same presence to Latin markets as it has in other regions. For example California/West Coast has historically been in the 30% range of ASMs for a long time. Alaska service about 20%. They are about the same today.

Mexico has shrunk, as aptly displayed by your long list of markets which they have exited.

Quoting lightsaber (Reply 2):
I see the LAX-PVR flight still exists (with steep fares a month out). So that is the one I care about.

I hear the CalJet shutdown left people high and dry so there is a rush to get seats to the Pacific Coast.

Quoting sonomaflyer (Reply 5):
To the O.P. - you have to keep in mind that the drug violence is Mexico has devastated their tourism industry.

Actually big misnomer

Tourism figures have never been higher.

Mexico sets tourism record despite drug violence
http://latimesblogs.latimes.com/worl.../mexico-tourism-drug-violence.html

Travel from US has only seen a 3% decline through the years of violence.

Same thing with capacity to Mexico. Outside the big hit following the Mexicana shutdown, capacity has also bounced back and even grown as others grew their Mexico presence. Alaska on the other hand has shrunk.

On a macro scale, Latin America is the hottest and most profitable region for US airlines. Even Southwest is coming out of its shell with new services to Mexico.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:29 am

Quoting LAXintl (Reply 9):
Same thing with capacity to Mexico. Outside the big hit following the Mexicana shutdown, capacity has also bounced back and even grown as others grew their Mexico presence. Alaska on the other hand has shrunk.

Except for MZT and ACA
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:35 am

One of the things that led to some withdraw by AS before I left was the taxes. I don't have any figures, but one number I remember was a $200 charge just for the fuelers to hook up. We were tankering on SFO-SJD-SFO flights if the passenger load was light enough.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:40 am

Quoting LAXintl (Reply 9):
Actually big misnomer

Tell that to the Pacific resorts cities outside of Cabo. When our cruise ship stopped in PVD for eight hours, every vendor and service provider asked us to tell folks in the U.S. that the Pacific Coast is safe. Mexican Marines screened off the cruise terminal area and a tour from the same cruise ship was robbed at gun point outside of PVD a couple of weeks earlier. Check out what's been going down in Acapulco.

Mexico is doing well in Cancun and Cozemel. It's doing fine in Baja but the rest of the Pacific Coast is struggling big time. The airlines may be insulated somewhat but the cruise industry certainly isn't.
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:47 am

Quoting sonomaflyer (Reply 5):
The AS service pull-down could be another casualty of the drug war


C'mon....we are talking Baja California Sur here. Not Ciudad Juarez or Culiacan.

Quoting LAXintl (Reply 9):
Travel from US has only seen a 3% decline through the years of violence.

I believe Cabo and Loreto saw even a smaller decline, even in the worst of times. Baja Sur is considered by some as a safe little bubble, being away from the main arteries to the north. Same can be said for the CUN and CZM.

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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:55 am

Quoting as739x (Reply 11):
We were tankering on SFO-SJD-SFO flights if the passenger load was light enough.

We still do. Given it's location, fuel is expensive in SJD.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 4:03 am

Quoting Tomassjc (Reply 14):

I bet. Let's hope the loads stay heavy enough that AS's isn't doing it much.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 4:11 am

Quoting sonomaflyer (Reply 12):
Mexico is doing well in Cancun and Cozemel. It's doing fine in Baja but the rest of the Pacific Coast is struggling big time. The airlines may be insulated somewhat but the cruise industry certainly isn't.

Bottom line is tourism numbers are setting records in Mexico still, and air travel remains strong between the US and Mexico.
According to the DOT for the 12-months ending June 2012 air traffic enplanements were up 4.6% between the nations.

Many airlines are taking advantage of this, while Alaska has let its presence shrink. Point of my thread.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 4:32 am

West CoastMexico can be brutally cheap, and AS' network outside of SEA/PDX is surprisingly limited--for instance SFO/LAX have very little AS service that is worth connecting to Mexico. If they can't make money on the local, they're out of the market, which is what I think happened in LAXLAP

Quoting SANFan (Reply 3):
I'd love to see AS try SAN-GDL.

SAN-ethnic Mexico is just not going to happen. There's just no reason when TIJ is $100 roundtrip cheaper and right next door.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 7:16 am

Quoting LAXintl (Thread starter):
I noticed in DOT filings that Alaska seeming has dropped another Mexico service.

They filed to inform the DOT that Horizon Air service between LAX and La Paz would be ending on April 6th freeing up the designation for other airlines potentially.

By my estimates this makes over 10 routes which have been dropped over the years.

While we certainly know Hawaii now plays a major part of AS operations, their Mexico flying at one time represented nearly 20% of ASM (peaked in mid 2000's) while in 2012 it down to 7%.

Keep in mind that Mexico service was used primarily to offset the seasonality of the flying to/from the state of Alaska; Hawaii doesn't suffer from such seasonality so extra capacity in wintertime is easily deployed there. Also, U.S. touists are still wary of Mexico following the outbreak of H1N1 there in 2009 coupled with the news stories of violence toward tourists on the rise.

Quoting as739x (Reply 7):
Quoting BoeingGuy (Reply 1):ACA service (not sure of the routing)
How many years you covering? I started with AS in '98 and ACA had been dropped already

I've been with AS since 1992, and ACA wasn't served then either.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 10:58 am

Quoting SANFan (Reply 3):

I'd love to see AS try SAN-GDL. Y4 seems to be having issues from here (and other places to be honest) and to the best of my recollection, we have never had an American carrier try to serve the SAN-GDL market. (DL has had the authority in that market for many years -- I don't think they have retained it recently -- but it was never served.) There have been a few attempts at SAN-GDL by Mexican cx but the competition of lots of cheaper (domestic) service from nearby TIJ airport has undermined the service from Lindbergh. I think AS would stand the best possible chance to do well with local (American) traffic from SAN, as well as some connecting traffic from some of the other new routes in and out of SAN.

Actually AS has been smart to stay out of SAN-GDL/MEX. It's not worth the effort. I feel Y4 will not last in SAN forever. As you mention, they seem to be having issues with their service. I don't see why they offer flghts from SAN when they are a low cost carrier and have a sizable operation @ TIJ. The costs of operating @ SAN are definitely markedly higher than TIJ. Perhaps they are still there for incentives given to them by SAN airport authority? Further, Y4 has yet to build a remarkable presence @ LAX. Four flights a day on the average is nothing when many thought they would add additonal service since MX's demise.

Quoting Deltal1011man (Reply 6):

did they fly SEA-MEX at one point?

No,. AM did.

Quoting MaverickM11 (Reply 17):
SAN-ethnic Mexico is just not going to happen. There's just no reason when TIJ is $100 roundtrip cheaper and right next door.

  
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 2:06 pm

Quoting EA CO AS (Reply 18):
I've been with AS since 1992, and ACA wasn't served then either.

If my fuzzy memory serves, AS's first two routes to Mexico were in the mid 80s between SFO-GDL and SFO-ACA with MD80s. I was working for the competition at SFO at the time. As I recall we carried all the leftover bags from the AS GDL flight on our DC-10s. I also remember when AS started SFO-MZT/PVR, they literally stole the market from MX.

I'll have to do a little research when I have time.....

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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 2:13 pm

Quoting LAXintl (Reply 9):
I hear the CalJet shutdown left people high and dry so there is a rush to get seats to the Pacific Coast.

Thank you. I hadn't paid attention to CalJet. (oops, I should have...)

Quoting LAXintl (Reply 16):
According to the DOT for the 12-months ending June 2012 air traffic enplanements were up 4.6% between the nations.

That is very interesting. Do you know how they are relative to the peak?


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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 2:25 pm

La Paz is servied by Volaris daily from Tijuana and Aerocalifia has twice weekly service. The economic situations has lowered traffic into Baja. AS once had mainline to Loreto then changed to Horizon.

SAN-ethnic Mexico is just not going to happen. There's just no reason when TIJ is $100 roundtrip cheaper and right next door.

When a flight crosses an international boarder, the taxes are higher. SAN are international flights for Volaris while TIJ flights are domestic. Volaris runs a lot of TIJ-ethnic Mexico flights.
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:13 pm

Horizon only serves LAX-LAP 3x weekly, I think that capacity goes to LAX-LTO which goes daily (currently 5x weekly) so really it's a transfer of capacity to another Mexican route.

I think the late 90s/early 200s was the real hayday of AS Mexico service. I remember back in 1997 LAX-SJD was 4x daily and PVR was 2x every day. Now SJD is 2x and PVR just once daily with a second flight on Saturday. Back then the only competition, if there was any was from Mexicana. Slowly U.S. airlines started flying to Mexico and AS Market share began to shrink.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 3:16 pm

Quoting BoeingGuy (Reply 1):
So I get more like 15.

I forgot PHX-PVR too. AS did both SJD and PVR from PHX at time.

AS did ACA according to an older timetable. I don't have it handy, but according to the route map it stopped somewhere else in Mexico - something like LAX-PVR-ACA or something like that.

Wasn't AS planning to serve Oaxaca a few years ago before the drug violence hit?
 
LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 6:10 pm

So now that we all agree AS has reduced its Mexico presence and dropped maybe 20 odd routes over the years what is the reason for all this?

1) Did AS who held a strong franchise with big market share find the competition too hard as ever more US airlines added Mexico capacity and growth of Mexican LCC's?
2) Is the north-south network lacking strength/feed it needs from its Mexico gateways like LA and SF Bay area?
3) AS simply found other opportunities (eg Hawaii, more transcons) and needed the frames ?
4) Horizon shake up made using them to Mexico less viable strategy?

Also any clue why AS has not attempted to try other markets - Central America - eg Costa Rica? Even trouble Frontier seems to have done OK with SJO for many years now.

Quoting lightsaber (Reply 21):
Do you know how they are relative to the peak?

I looked back until 2000, and the peak year for air travel between the US and Mexico was 2007-2008 with about 20mil passengers.
2012 should end with about 19.3-19.5mil, and as alluded to prior the market the last 2-years has grown at rather strong rate.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 6:46 pm

Quoting sonomaflyer (Reply 5):

To the O.P. - you have to keep in mind that the drug violence is Mexico has devastated their tourism industry.

That is frankly a huge load of bull. Drug violence on the one hand is localized in very specific areas near the border and in certain other regions. It is not a widespread situation afflicting the entire country, Mexico City or most of the major resort destinations. 2011 is the year when Mexico has seen more domestic and international tourists ever (2012 numbers are expected to be higher, but are still not published). We had 22.67 million international visitors during 2011, which is a historic high. It is 2% higher than 2010 and 5.7% higher than 2009. Mexico is a major touristic powerhouse despite what you choose to believe.

Quoting sonomaflyer (Reply 5):
Mazatlan for example won't see a cruise ship according to cruisett.com

That is true. Mazatlan is one of the places that has suffered badly because of violence. The whole state of Sinaloa is a major drug violence area.

Quoting sonomaflyer (Reply 5):
I'd love to spend time in places like Acapulco and the areas inland but I'd be insane to take my family there given its on a drug trade corridor.

No, you don't want to visit Acapulco. Unless you go to a secluded place in the "new" Acapulco like the Banyan Tree in Puerto Marqués, the Las Brisas resort, etc., Acapulco has lost its charm. The main Acapulco bay area is a shadow of its former self and I wouldn't want to go there at all. Playa del Carmen or Nuevo Vallarta are much, much better propositions.

Regarding inland places, you could visit the beautiful colonial towns in the Bajío region, like Guanajuato and San Miguel de Allende. There is also Oaxaca southeast of Mexico City, which is my favorite city in the entire country. These places are not only incredibly beautiful, but also significantly safe. I'd feel safer in Guanajuato than in DC, Philly or New Orleans. I know what I am talking about. I have lived in the U.S., and there are many places in the U.S. that are far scarier than Mexico City or some other major towns or tourist destinations in Mexico.

Quoting sonomaflyer (Reply 12):
Mexico is doing well in Cancun and Cozemel. It's doing fine in Baja but the rest of the Pacific Coast is struggling big time. The airlines may be insulated somewhat but the cruise industry certainly isn't.

A bit of a stretch too. Nuevo Vallarta is quite alright. Same with the Huatulco- Puerto Escondido corridor. Ixtapa is also very safe if you don't venture far afield by car. I understand Rocky Point is very peaceful too. Never heard bad stories about Manzanillo. It is just Mazatlán and Acapulco. Even the coast of Baja is safe. I imagine by your username that you live in Sonoma, CA, near many wineries. Maybe you should take a chance and visit the Mexican wine region south of Tijuana, near Ensenada. There are several boutique hotels in the area within the properties of some of the wineries which, btw, are producing fantastic wines these days (google Vino de Piedra).
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 6:55 pm

Looks like the AS operation at ACA was brief. SFO-GDL-ACA began April, 1989 and ceased October, 1990.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 8:23 pm

Quoting EddieDude (Reply 26):

I appreciate the insight Eddie. I shouldn't have implied the entire country is unsafe. There are certainly areas which are fine and largely untouched by the drug violence. However, many areas which in the past saw large number of visitors/cruise ships etc have been badly affected by the troubles. Sinaloa as you cited is an example along with Vera Cruz, the border areas opposite Texas, inland from Ixtapa and many parts of Acapulco. Even parts of Jalisco are not safe given the violence.

Much of this is also a perception problem. Tourists can go to many different places on vacation and are very risk adverse as a rule. This has benefited Cancun and Cozemel along with Baja and some parts of the interior but badly hurt the other Pacific Coast areas.

I hope things return to the way it was pre-drug wars. I love spending time down there and I very much want my family to learn to love Mexico as I do.
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 8:25 pm

Quoting LAXintl (Reply 25):
So now that we all agree AS has reduced its Mexico presence and dropped maybe 20 odd routes over the years what is the reason for all this?

The reduction of ASMs to Mexico is twofold:

1. Demand to Mexico began falling like a rock in 2009
2. At the same time, demand - and yields - to Hawaii were far, FAR better
3. There hasn't yet been a compelling enough financial reason to pull those ASMs from Hawaii and other markets

AS hasn't given up on Mexico and will not, however they're in the business of making the most profitable use of their aircraft possible, and deploying those assets to other markets have proven to be a far better use of those ASMs.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 10:26 pm

Quoting EddieDude (Reply 26):
That is frankly a huge load of bull. Drug violence on the one hand is localized in very specific areas near the border and in certain other regions.

But the problem, Eddie, is that at least here on the West Coast, the only news we've been getting is all bad. Average people aren't necessarily distinguishing good areas from bad areas .... in the news it's just: Mexico. So yes, there is a fear factor that can only be harming the entire country's image and keeping some people away. With the cruise lines dropping West Coast ports (which AS does/did focus on) because of the reported troubles, the perception is that it is a place to avoid, right or wrong.

I'm just speculating, but with AS continuing to expand in more drama-free Hawai'i, it make sense to redistribute the fleet to maximize markets. For QX, obviously that's not behind the draw-back, but if they aren't making money in a market, pull out. I suspect there may also be an economic downturn affecting the "ethnic" Mexico market, which could explain AS/QX contraction along with the ever-shifting AM and Volaris frequencies in the non-touristic markets. And too, the expansion of Volaris and other low-cost models is probably putting a pinch on what had been higher-fare marketing by higher cost AS and other U.S. carriers. The FL/WN expansion is going to further erode pricing, so it may be time for others to pick up their toys and go play in another sand box.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 10:38 pm

Quoting EA CO AS (Reply 29):
1. Demand to Mexico began falling like a rock in 2009

Well you are right H1N1 pandemic certainly scared people away, and traffic did fall in 2009 by 12%, but this quickly rebounded in 2010 and 2011.
Also the Mexicana shutdown in 2010 provided a big boost for competing airlines as they looked to back fill the capacity.

So instead of riding out the turbulence for '09 and then coming back strong the year after as most, Alaska seems to have bid adieu to good portion of its Mexico franchise not to return.

Sure the opportunity of Hawaii came along, but it still seems interesting to me AS has folded much of its cards to a region which has produced the strongest profitability for the industry as a whole and has the strongest forecast traffic growth opportunity rivaling the Asia-Pacific region for US airlines.

Certainly no airline needs to be everywhere all the time, just interesting observation imo that Alaska virtually a US leader in many markets, now plays such a diminished role down South.

[Edited 2013-03-01 14:47:08]
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SonomaFlyer
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 10:46 pm

Quoting LAXintl (Reply 31):
Alaska seems to have bid adieu to good portion of its Mexico franchise not to return.

I wouldn't go that far. They made a calculation to put their 738s into ETOP status and fly them to Hawai'i and have made out very well in the process. I think they will come back more to Mexico (which for AS mostly means the Pacific Coast) once things calm down.

I hope that if the violence recedes, either AS or a competitor jumps back into the market from the Bay Area. Places like Acapulco can certainly help themselves out with a bit of revitalization to bring folks back as well.
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Fri Mar 01, 2013 10:54 pm

Quoting sonomaflyer (Reply 5):

I've certainly noticed a slow down of cruise ships in Cabo, I stay at a resort where the ships are only a couple hundred meters away.

I was there for the past two years and this year there was a significantly less amount of ships there.

It is truly ashame of all these drug wars really slowing down Mexico's tourism sector.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sat Mar 02, 2013 8:26 am

Quoting LAXintl (Reply 31):
the Mexicana shutdown in 2010 provided a big boost for competing airlines as they looked to back fill the capacity.

AS has instead tried making some headway in the non-beach Mexico markets since the yields are better than the resorts, but Mexico is still a dream come true for wholesalers selling bulk fares at junk yields, and pressuring AS to open up even more low-bucket inventory to attract the VFR crowd.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sat Mar 02, 2013 2:11 pm

Quoting Wingtips56 (Reply 30):
I suspect there may also be an economic downturn affecting the "ethnic" Mexico market, which could explain AS/QX contraction

Actually Wingtips, the ethnic market on AS is going just fine. Besides the obvious GDL and MEX routes, I've seen quite a bit of VFR traffic through resort cities, especially during the holidays, to places like PVR (for western Jalisco and Nayarit) ZLO (for Colima and Michoacan) and ZIH (Guerrero). Back when things were at the lowest, it was the Mexican national market that kept these routes alive. As previously mentioned, the contraction of AS/QX service is simply to put aircraft where they will make the most money.

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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sat Mar 02, 2013 2:46 pm

Quoting EA CO AS (Reply 34):
AS has instead tried making some headway in the non-beach Mexico markets since the yields are better than the resorts, but Mexico is still a dream come true for wholesalers selling bulk fares at junk yields, and pressuring AS to open up even more low-bucket inventory to attract the VFR crowd.

It's surprisingly the other way around; by all accounts--other than internal data obviously--GDL/MEX fares are far worse from LAX than SJD for example, and much farther.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sat Mar 02, 2013 7:11 pm

Quoting EA CO AS (Reply 34):
AS has instead tried making some headway in the non-beach Mexico markets since the yields are better than the resorts, but Mexico is still a dream come true for wholesalers selling bulk fares at junk yields, and pressuring AS to open up even more low-bucket inventory to attract the VFR crowd.

The ethnic market as you mention is often not direct sale - its controlled by consolidators.

To succeed in the long run one needs to get into bed with them. However its not as bad as it sounds. Selling to these groups is often easier then regular individual sales as once you are set as they do most of your work and you are not out there beating the drums to generate thousands of individual sales.

However doing things like advertising in Spanish language media, billboards, and Spanish version of websites are all very helpful in building affinity with such communities.
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hiflyeras
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sat Mar 02, 2013 7:16 pm

MEX and GDL are doing just fine...flights are always near capacity. I wouldn't be surprised to see AS someday start service via RJ or mainline to cities such as Leon, Puebla and/or Toluca out of LAX.
 
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sat Mar 02, 2013 9:43 pm

Quoting LAXintl (Reply 37):
The ethnic market as you mention is often not direct sale - its controlled by consolidators.

I'm not sure that's true anymore for the major LAX trunk routes like GDL or MEX. They are so hypercompetive on both sides of the border, and the fares so low, that consolidators would no longer provide any edge or discount. You can regularly find LAXGDL for as low as $350 roundtrip all in, or about $115 ow that the airline sees. That's less than carriers are getting for Northeast-Florida.

Quoting HiFlyerAS (Reply 38):
MEX and GDL are doing just fine...flights are always near capacity. I wouldn't be surprised to see AS someday start service via RJ or mainline to cities such as Leon, Puebla and/or Toluca out of LAX.

Of course they're full--that's probably because the break even load factor is 110%.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 12:20 am

Actually the ethnic agents have never been more important. Now with ever more people travelling their business is booming.

Amadeus put out an interesting research presentation (you can download from below link) explaining their important niche. It highlights that booking volume are up significantly in the last decade, especially in the big metro areas like LA, NYC and Miami.
http://www.travelagentcentral.com/tr...itable-niche-travel-agencies-29127


To understand them, one needs to understand the communities they serve. Its things like internet use, language, and most particularly credit card usage which are low in many of these communities. As a result its often a cash business, and your local corner travel agent becomes the nexus and most convenient avenue for travel planning.

To show how important such agencies are even Volaris and Interjet which by their LCC nature should have nothing to do with such accommodations, are willing to modify their practices by offering things like holding reservations for payment later by agents or 3rd party stores like Sears, installment pay programs, ability to use Mexican bank vouchers or money grams, and even allowing generic no name reservations which agents can assign names later for a small fee.

So go to many of these communities and the travel agent business is still big, and airlines must be willing to work with them or risk losing a huge category of travelers.
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MaverickM11
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 1:01 am

Quoting LAXintl (Reply 40):
Actually the ethnic agents have never been more important. Now with ever more people travelling their business is booming.

They are in other areas, but in the LA area to GDL/MEX the fares are so low and the populace is cotinuously conditioned to book more and more travel online and directly. There is no data to suggest any carrier is getting much of any premium out of LAX or an advantage from going through consolidators in these two specific markets, and in general a whole bunch of tools are used by carriers to ferret out any special fares that airlines may be offering to consolidators, travel agents, web only, etc.. There's just not much room for a consolidator to take a slice of such a hypercompetitive market. In something like CHIMLM there's more room to drive the market, but even then I think the long term trend is going to marginalize consolidators.

Quoting LAXintl (Reply 40):
So go to many of these communities and the travel agent business is still big, and airlines must be willing to work with them or risk losing a huge category of travelers.

There's no question it's one of the last bastions of the travel agent business, but they need to make money too, and there's more money to be made selling a bunch of LAXEVN tickets, for example, than taking a cut of a zillion LAXGDL tickets at $115ow, when every airline is matching or undercutting the consolidator.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 2:43 am

I am confused. Who do you say is not making money on a $350 GDL ticket?

If its the airline, the revenue per mile is over $0.10. That's higher then someone like JetBlue or Delta earn on average to JFK from LAX. Also don't forget the very nice excess baggage fees airlines earn beyond the headline ticket price.
Plus remember tickets are not always el-cheapo $350's. Try flying for the holidays or upcoming Easter period. Volaris is charging $600 from LAX to GDL for that weekend.

If its the travel agent, well they also do quite well from the ones I know. You have airlines like TACA paying upwards of $80 per ticket, Volaris in the $30 range. That's much better the $20 service charge they are lucky to tack on to domestic tickets these days. Then you also have all the incentive and override payments for the top producers.

And no ethnic consumers are not conditioned to use online bookings especially when they don't have bank accounts let alone credit cards. One airline that found this out the hardway was Spirit and its venture into Central America from LAX. Its refusal to work with agencies on either end, or come up with creative payment methods had its planes come and go with mere 30-40 people onboard.
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 3:14 am

Quoting LAXintl (Reply 42):
I am confused. Who do you say is not making money on a $350 GDL ticket?

$110.00 of which are taxes.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 4:05 am

$240 for the airline is almost $0.10/mile on LAX-GDL.

Like I said better then what JetBlue or Delta garner on LAX-JFK.

Total PRASM in Latin markets - those ethnic ones is much higher then simply ticket revenues.

TACA does not have an armored car show up nightly at LAX to collect the excess baggage cash for no reason.
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MaverickM11
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 5:32 am

Quoting LAXintl (Reply 44):
$240 for the airline is almost $0.10/mile on LAX-GDL.

A 350 all in roundtrip ticket ends up being about 8.5 cents/mile...the airline needs every last cent they can get from that.

Quoting LAXintl (Reply 44):
Like I said better then what JetBlue or Delta garner on LAX-JFK.

Well, DL/B6 transcon fares are dreadful

Quoting LAXintl (Reply 44):
Total PRASM in Latin markets - those ethnic ones is much higher then simply ticket revenues.

Depends on the carrier, but with the foreign carriers, they're less stringent on the bag requirements, and don't bother with buy on board, so I don't think there's a big wedge between ticketed revenue and total passenger revenue.

Quoting EA CO AS (Reply 43):
$110.00 of which are taxes.

$125 according to AS.com for LAXGDL Wow!
Quoting LAXintl (Reply 42):
And no ethnic consumers are not conditioned to use online bookings especially when they don't have bank accounts let alone credit cards

Sure they are--airlines and travel agents still accept cash. Abuelas just get their grandkids to search the internet and then bring the fare they want to their favorite travel agent or airline.

Quoting LAXintl (Reply 44):
TACA does not have an armored car show up nightly at LAX to collect the excess baggage cash for no reason.

Consolidators are more meaningful for Central America than Mexico, but again as competition increases and fares go down, they serve a quickly decreasing purpose. Anyone who is going through a consolidator for LAXGDL/MEX is probably getting rooked; I just don't see why anyone would bother--it's like going to a consolidator for NYCFLL.
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LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 7:02 am

Quoting MaverickM11 (Reply 45):
A 350 all in roundtrip ticket ends up being about 8.5 cents/mile...the airline needs every last cent they can get from that.

Sure airlines would like every penny/peso they can get, but even the discount Mexico ticket is not as bad as some of the domestic yields in the US.

I have had plenty of people I know pay $600-800 for advance purchase trips to Mexico City for example. The average revenues airlines garner are not solely reliant on that $350 ticket.

Quoting MaverickM11 (Reply 45):
Depends on the carrier, but with the foreign carriers, they're less stringent on the bag requirements, and don't bother with buy on board, so I don't think there's a big wedge between ticketed revenue and total passenger revenue.

Yes depends on the carrier.

LCC like Volaris is a Nazi when it comes to bags. They charge $5+/kilo in excess. You can save a bit (down to $4/kilo) by prebooking the additional weight.
While Volaris does not do food onboard sales but they peddle other services like ground transportation, baggage delivery, hotels, etc. Plus like Spirit they also ding you for some extra charges here and there.

Quoting MaverickM11 (Reply 45):
Sure they are--airlines and travel agents still accept cash. Abuelas just get their grandkids to search the internet and then bring the fare they want to their favorite travel agent or airline.

Again the transaction is via a travel agent.

Here is a tidbit: Per IATA in 2010 - 68.5 of US domestic tickets were purchase online either directly with airline or travel sites, and 62.3% without any subsequent airline or travel agent interruption. Same year Mexico - only 11% of tickets were purchased online. Two very different worlds.

Quoting MaverickM11 (Reply 45):
I just don't see why anyone would bother--it's like going to a consolidator for NYCFLL

But they do. I can point you to several LA based agencies that sell AeroMexico and Volaris tickets like candy.
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sxf24
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 4:38 pm

Quoting LAXintl (Reply 46):
Here is a tidbit: Per IATA in 2010 - 68.5 of US domestic tickets were purchase online either directly with airline or travel sites, and 62.3% without any subsequent airline or travel agent interruption. Same year Mexico - only 11% of tickets were purchased online. Two very different worlds.

In 2010, the Mexican market had no major LCCs. It is a completely irrelevant data point compared to today.
 
LAXintl
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 4:59 pm

Quoting sxf24 (Reply 47):
In 2010, the Mexican market had no major LCCs. It is a completely irrelevant data point compared to today.

Both Volaris and Interjet have been around since 2005. Plus there has always been a string of other LCCs over the years in Mexico.

But still does not change the fact that internet bookings are a rather small thing still due to lack of computer access and limited credit card use.

Its simply the nature of the beast, the culture it totally different for travel booking both sides of the border.
Many are more likely to buy a ticket in a bank lobby then sitting in their living room online.

Here is a 2012 article if it makes you feel better:
For most Mexicans, the digital age is still out of reach
http://phys.org/news/2012-01-mexicans-digital-age.html


But I am not sure why the argument here - we are speaking about Alaska Airlines in this thread.

Alaska and others serving Mexico and other Latin markets must make the appropriate accommodations to serve the different conditions present which includes heavy reliance on brick and mortar sales methods to connect to their customers.
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DL747400
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RE: AS Ends Another Mexico Flight; Whats Latin Future?

Sun Mar 03, 2013 5:01 pm

Quoting EddieDude (Reply 26):
That is frankly a huge load of bull. Drug violence on the one hand is localized in very specific areas near the border and in certain other regions. It is not a widespread situation afflicting the entire country, Mexico City or most of the major resort destinations. 2011 is the year when Mexico has seen more domestic and international tourists ever (2012 numbers are expected to be higher, but are still not published). We had 22.67 million international visitors during 2011, which is a historic high. It is 2% higher than 2010 and 5.7% higher than 2009. Mexico is a major touristic powerhouse despite what you choose to believe.

That may or may not be true, but this American will not cross the border into your country, nor will I spend my $ there until there is clear reason to believe that the safety of myself and my family is not at risk. And despite what you believe, there are many Americans who feel this way. Not trying to bask Mexico, but perception is often reality when people are making decisions on where to spend their travel $$$. The government of Mexico has only themselves to blame for this current mess.
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